Unitech demands $150 million from Telenor

Realty firm Unitech has sought about $150 million from Norway's Telenor to sell its 32.7% stake in their telecom joint venture and end the bitter dispute between two partners, an executive with direct knowledge of the development told. Unitech is learnt to have made this proposal to the Company Law Board. The realty firm's offer takes into account that it invested about $125 million as equity into its Unitech Wireless and spent another $25 million in the initial phase before divesting a majority stake in its mobile phone arm to Telenor. 
“Both parties have been asked by the CLB not to comment on the proceedings that took place within closed chambers. On our part, we will respect the directions of the CLB. What we have earlier stated it is that the partnership with Unitech is over, and it is our intention to form a new company to which Uninor's assets can be transferred. This company will form the platform with which we will approach the upcoming auction,” the Telenor spokesperson said in his reply to an query. 
Last month, Telenor's CEO told that the Norwegian telecom major was not interested in buying out the minority stake held by its estranged partner and wanted to make a fresh start with a new partner. He had also dismissed any possible deal with Unitech and said: “Without spectrum, there is nothing to buy. Everyone will be willing to be bought out if the price is sufficient. But after the licences were revoked, the JV no longer exists.” 
Telenor's Indian operation, with about 40 million customers, was one of the worst affected by the Supreme Court's February 2 orders to cancel 122 mobile licences issued in 2008. Following the apex court's decision, the ongoing differences between both partners over raising funds for their JV took a new twist, with Telenor serving Unitech a divorce notice and also seeking compensation from its Indian partner for damages. The Norwegian telecom major also announced that was forming a new company in India and plans to migrate its existing business, including customers and employees, to this entity. 
Executives aware of the development said that Unitech's latest offer was subject to several conditions. First, the realty firm will have to be exempted from any liability that Unitech Wireless faces in the future. Telenor must also bear total responsibility for the Rs 8,500-crore debt on the books of their JV and must withdraw legal proceedings seeking compensation from Unitech for all its investments, guarantees and damages caused by the apex court's decision. In return, Unitech will drop its objections to Telenor shifting its businesses and customers to a new company, executives aware of the development added.